If you’re thinking of opening a ‘Help to Buy ISA’ then you better be quick, as there is little more than a month left for first time buyers to open the government scheme designed to help you save for a mortgage deposit to buy a home.
Help to Buy ISAs are a type of ISA designed to help first-time buyers save up a deposit for their home. The government will add 25% to your savings, up to a maximum of £3,000 on savings of £12,000.
The government scheme allows people who have never owned a house before, to save money and receive a 25% bonus on top of what they put away.
But with the scheme coming to an end on 30 November 2019, time is running out. It will then be replaced by a Lifetime ISA (LISA), for people aged between 18 and 39 to save for a home or retirement.
This is a scheme which allows people to put money away to be used on their first home. Whatever is saved will receive a 25% boost from the government - with a maximum total top-up of £3,000.
In addition, you also earn interest on whatever you save yourself – it is best to shop as rates vary from bank to bank.
In the first month, you can deposit up to £1,200, with a maximum of £200 every month after. If the opening balance is too much for you, the ISA can be opened with just £1. However, the government will only start topping up your savings after you have saved at least £1,600.
And the money you put away can only be used on a house up to the value of £250,000, or £450,000 in London.
Help to Buy ISAs are available to each first-time buyer, not each home. So, if you’re buying a property with your partner, for example, you’ll be able to get up to £6,000 towards your deposit!
Launched in 2017 the scheme helps you to save up for your first home or your retirement.
Just like Help to Buy, this one offers a government top-up of 25%, though you can save up to £4,000 per year - either as a lump sum or as and when you can - which will give you a £1,000 bonus.
To qualify for the LISA, you must be aged between 18 and 39, however, once you're signed up you can deposit in it until you are 50.
The money can be used for a first home up to the value of £450,000 - once you have had an account for at least 12 months - or towards the cost of retirement past the age of 60.
For more details visit https://www.moneysavingexpert.com/savings/help-to-buy-ISA/
If you need regulated financial advice, please speak with a professional financial adviser.